| They are otherwise called angel investors, and in | | | | Their good credit standing facilitates loans and grants |
| these trying times, they could just be the breath of | | | | in favor of the owners that they would not have |
| fresh air that your struggling business needs to get | | | | been able to secure on their own. |
| back on track. Who are silent business investors, and | | | | Once a silent investor decides to put his money into |
| what role do they play in the success—or | | | | a business venture, he necessarily becomes |
| failure—of a business? | | | | interested in the success of the venture. Because of |
| Silent business investors are people who infuse capital | | | | this, he opens his network for the startup company |
| into a business, usually a startup, but who prefer to | | | | to access and explore. Investors' network of |
| leave the management of day-to-day affairs to | | | | connections often proved to be a rich source of |
| other people. They typically decide to put their | | | | business opportunities for startups. |
| money into the venture when their business acumen | | | | As we have said, in these tough times, silent business |
| tells them it has promise. They invest capital, then sit | | | | investors could just be the break that your business |
| back to watch their money grow, or share in the loss | | | | needs. But before you sign on the dotted line with a |
| if the venture fails. | | | | silent investor, make sure you do your homework. |
| It has been said that the primary role of silent | | | | First, you have to level any potential investor's |
| business investors in a business venture is to infuse | | | | expectations. Sit down with anyone interested and |
| capital, especially to startup companies. While a | | | | explain everything in detail, including the risks. Don't be |
| successful business starts with a great idea, it | | | | afraid of turning them off. Chances are, they know |
| definitely requires more than that to set up the | | | | that every business venture is faced with risks, and |
| business. For the most part, you will need enough | | | | yours isn't an exception. |
| capital to establish your business and get it working, | | | | Lastly, when you've agreed on the investment |
| and to sustain it until such time that it breaks even, | | | | terms, make sure you get down all the items in black |
| and then start earning profits. To get enough funding, | | | | and white. Better yet, consult a lawyer when drafting |
| most startups turn to silent business investors, | | | | the contract so you're that all the details are clear |
| especially when the money they've pooled from | | | | and settled, and that your agreement is enforceable |
| contributions of family and friends is not enough to | | | | in the courts, in case your relationship turns from |
| get the business off the ground. | | | | sweet to sour. It is no exception if you're dealing |
| Some silent business investors do not provide the | | | | with family or long-time friends. Business has a way |
| actual capital to start the business, but offer their | | | | of turning best friends into the worst enemies, so |
| own property as collaterals instead so the startup | | | | make sure you protect your interest with a formal |
| owners can secure a grant or loan. Others act as | | | | contract. |
| sureties, guarantors or co-makers for startup owners. | | | | |